1. A bank has $100 million of investment grade bonds with a duration of 8.0 years. This bank also has $500 million of commercial loans with a duration of 5.0 years. This bank has $300 million of consumer loans with a duration of 2.0 years. This bank has deposits of $600 million with a duration of 1.0 years and nondeposit borrowings of $100 million with an average duration of .25 years. What is this bank's duration gap? These are all of the assets and liabilities this bank has.

A. This bank has a duration gap of 5.15 years

B. This bank has a duration gap of 3.75 years

C. This bank has a duration gap of 3.64 years

D. This bank has a duration gap of 3.44 years E. This bank has a duration gap of 13.75 years

2. The Third National Bank of Edmond reports a net interest margin of 5.83%. It has total interest revenues of $275 million and total interest expenses of $210 million. This bank has earnings assets of $1115 million. Suppose this bank's interest revenues rise by 8 percent and its interest expenses and total earning assets both rise by 9 percent next year. What is this bank's new net interest margin?

a. 5.38%

b. 7.09%

c. 5.83%

d. 7.80%

e. 5.60%

3. A bank has an average asset duration of 1.15 years and an average liability duration of 2.70 years. This bank has $250 million in total assets and $225 million in total liabilities. This bank has:

a. negative duration gap of 3.85 years

b. none of the responses are correct

c. negative duration gap of 1.55 years

d. positive duration gap of 1.28 years

e. negative duration gap of 1.28 years